NAIROBI, Kenya — Kenya has reached a new financing deal with a consortium of Chinese companies to restart its long-stalled railway extension project toward the Uganda border, a move poised to boost regional trade and connectivity.
Finance Minister John Mbadi told the National Assembly that the Chinese consortium will provide 40% of the $5.3 billion required to construct the 475-kilometer Standard Gauge Railway (SGR) from Naivasha to Malaba.
In return, the companies will operate the line and collect toll fees for an agreed period to recover their investment.
An additional 30% of the funding will come from the Export-Import Bank of China (China Exim Bank) through loans.
The remaining 30% will be covered by the Kenyan government via a railway development levy or by securitizing that levy.
A Revival of Stalled Ambitions
The project was originally paused in 2019 after China Exim Bank withheld funding, citing the need for a fresh commercial viability study.
The bank had previously financed Kenya’s initial 590-kilometer SGR segment between Mombasa and Naivasha.
Under the new agreement, loan repayments on the new segment will begin after 2029—by which time Kenya anticipates repaying over 80% of its debt from the first phase.
Strategic Implications
China’s ambassador to Kenya, Guo Haiyan, reaffirmed Beijing’s commitment to supporting Kenya’s infrastructure ambitions earlier this year.
Analysts believe the railway’s extension to Malaba could have strategic regional implications, particularly with Uganda and the mineral-rich Democratic Republic of Congo (DRC) in close proximity.
One Kampala-based analyst noted that for China, extending the railway deep into East Africa could offer long-term access to critical minerals and new markets.
If completed, the SGR extension would become a key artery in the Northern Corridor, strengthening trade links across East Africa and bolstering Kenya’s position as a logistics hub.
